Trends in Office Buildings in 2015: Tenant and Investor Insights

In the world of commercial property management, there’s a million dollar question: What do tenants want? Apparently, the answer varies, depending upon who you ask. A few things, however, were unanimous.

Investors WANT to Mess with Texas

According to the Emerging Trends in Real Estate 2015 report, when investors responded regarding the five hottest markets of 2015, 3 of the top 5 cities were in Texas. #1 was Houston, #2 was Austin and #5 was Dallas/Fort Worth. Indeed, Houston was an all-around winner, topping the charts for investment and development and coming in with a solid second place for housing market expectations to match strong commercial office building prospects.

However, location isn’t the only thing that matters in commercial office buildings in 2015 and beyond.

What Tenants Want

At the Future of Office Summit in DC in March of 2015, panelists met with a journalist for BizNow and offered their insights about the future of commercial office building leases. Gary Block (of Meridian) implied that location (while still important) isn’t as important as it once was. Today, the trends are tipping away from “location, location, location” and towards a residual “experience”.

While the trend might have initially been written off as an oddity exclusive to Millennials, if that ever was the case, the disease was contagious and has grown to epidemic proportions. One aspect of this trend is having office spaces that are move-in ready, fully decorated and that embrace a greater “theme” or “feel.

Tenants Want Office Buildings that are Submetered

According to Samantha Durbrow, the “Energy Beat” at Aquicore, there are four reasons that a leading trend among office building tenants (especially those in triple net leases) are begging for submetered spaces. First, those in triple net leases want to insure that charges are fair. Additionally, responsible tenants who are investing in energy-efficient technologies and appliances want to track their return on investment. Third, there are companies that are offering themselves up as self-proclaimed sustainability leaders and want to put their money where their mouth is. Finally, some are so dedicated to this end that they are entering into competitions, many of which will require contestants to have submetered office building leases.

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